1. Consider a 3-year coupon bond with a face value of 100 dollars, and a coupon rate of 10%. Suppose the discount rate is 10%, compute the price (ie, present value) of this bond. Suppose the discount rate increases to 12%, calculate the percentage change in price of bond.
2. Consider a 2-year coupon bond with a face value of 100 dollars, and a coupon of 10 dollars. Suppose the market price of the bond is 98 dollars, compute the implied yield to maturity.